EE|Times: Samsung to reinvent itself in Silicon Valley

Samsung Electronics Co. Ltd. is planning to open a number of innovation centers outside Korea as part of a project to reinvent the company and ride the next wave of business and consumer-driven opportunity, according to Young Sohn, newly-appointed Chief Strategy Officer for the company.

One of the first such centers will be in Sand Hill Road, Menlo Park, in the heart of California’s Silicon Valley. Sohn revealed the plan as part of talk given at the International Electronics Forum being held here.

Sohn, was previously a senior advisor to Silver Lake Partners and prior to that was CEO of startup Inphi Corp. Sohn serves on the boards of directors of processor IP company ARM Holdings plc (Cambridge, England) and EUV laser source company Cymer Inc. (San Diego, Calif.)

Sohn said one of the things his role at Samsung requires is that he looks at how large organizations innovate. He referenced successful examples including Apple, Lockheed with its Skunk Works and Sun Microsystems with Java. One of common characteristics was that relatively small teams had been allowed to innovate away from operational pressures, Sohn said.

“We’re opening an innovation center in Silicon Valley, away from Korea, away from the mothership. We’ll be looking at the Cloud, at big data. We also have a center in Israel.” He added: “We’re reaching out to global talent but it is also about culture and business innovation.”

Part of Sohn’s talk to assembled executives here made the observation that the Cloud – where data and applications are hosted in large datacenters – is already changing the hierarchy of major IT companies and that even bigger changes are set to come in the next five years.

“Companies such as Facebook and Google are designing their own hardware, partly because they can and partly because their needs are different,” said Sohn, indicating that this is creating an opportunity in microserver architecture. “Enterprise computing was driven by the traditional hierarchy of companies; IBM, Dell and so on. Now there is a Cloud-driven micro-architecture, microserver, which we think will be ARM-based.

Another theme that is developing at the conference is that technology innovation is no longer enough to bring success. It has become necessary to innovate at the business model level as well.

Sohn, declined to say how many people Samsung would employ at the Silicon Valley innovation center. “Budget is not an issue but it is not something that depends on scale.”

Overall Samsung expects to employ several thousand engineers in Silicon Valley by 2020, but only a small percentage of these would be in the innovation center. “It’s not just looking at technology, it’s looking at business models, collaborations and ecosystems.

Sohn argued that this sort of work could not be done at Samsung’s traditional locations which were focused on manufacturing excellence. Sohn said that business model innovation still tends to originate in the United States and a few other locations around the world.

“We’re putting it in Sand Hill Road. That’s making a statement,” said Sohn. Sand Hill Road is well known for its concentration of venture capital companies. Samsung already has an innovation center in Israel Sohn said. He also said that Cambridge in England could be a suitable location.

In terms of the total number of Samsung innovation centers around the world Sohn estimated it could be as few five. “There are not that many places around the world where truly innovative thinking is going on.”

Another theme that is developing at the conference is that technology innovation is no longer enough to bring success. It has become necessary to innovate at the business model level as well.

Sohn, declined to say how many people Samsung would employ at the Silicon Valley innovation center. “Budget is not an issue but it is not something that depends on scale.”

Overall Samsung expects to employ several thousand engineers in Silicon Valley by 2020, but only a small percentage of these would be in the innovation center. “It’s not just looking at technology, it’s looking at business models, collaborations and ecosystems.

Sohn argued that this sort of work could not be done at Samsung’s traditional locations which were focused on manufacturing excellence. Sohn said that business model innovation still tends to originate in the United States and a few other locations around the world.

“We’re putting it in Sand Hill Road. That’s making a statement,” said Sohn. Sand Hill Road is well known for its concentration of venture capital companies. Samsung already has an innovation center in Israel Sohn said. He also said that Cambridge in England could be a suitable location. Samsung now has about 300 staff in Cambridge through the acquisition of the handset connectivity/location development operation of CSR plc.

In terms of the total number of Samsung innovation centers around the world Sohn estimated it could be as few five. “There are not that many places around the world where truly innovative thinking is going on,” he said.